Russian Central Bank key rate reaches record low

Russia’s Central Bank has lowered its key rate by 25 basis points to another record low of 4.25 percent. The bank claimed that disinflationary factors continue to exert considerable influence on inflation, making the rate cut necessary. It also downgraded its inflation forecast for 2020 from 3.8-4.8 percent to 3.7-4.2 percent for 2020, whereas in 2021 inflation is expected to be 3.5-4 percent. “A significant easing of monetary policy since April aims at curbing this risk and stabilizing inflation close to 4 percent over the forecast horizon. According to the Bank of Russia’s forecast, given the current monetary policy stance, annual inflation will reach 3.7-4.2 percent in 2020, 3.5-4.0 percent in 2021 and will stay close to 4 percent later on,” wrote the Central Bank in a statement.